Lean Manufacturing A Presentation With Success Stories!!! Contents A Brief Over-view A Brief History Lean Enterprise Tools & Methodology Successful Case Studies Conclusion How to make Lean Work Lean People Overcoming Obstacles Benefits of Lean Manufacturing Key Definitions Value – A capability provided to a customer at the right time at an appropriate price as defined in each case by the customer. Product ( or service) features, cost, performance and availability are dimensions of value. Waste – Any activity that consumes resources but creates no value (waste). What Is Lean Manufacturing? Lean manufacturing can be defined as “A systematic approach to identifying and eliminating waste (non-value-added activities) through continuous improvement by flowing the product at the pull of the customer in pursuit of perfection.” Over-view of Lean Production Focuses on eliminating wastes in process Is not about eliminating people Is about expanding capacity by reducing costs and cycle time Is about understanding what is important to customer Lean = Eliminating Waste (Typically 90-95% of Total Lead Time Is Non-Value Added!) D - Defects O - Overproduction W - Waiting N - Non (under) utilized people T - Transportation I - Inventory M - Motion E - Extra (unnecessary) processing Lean Is Not Restricted to Shop-floor Lean is not a “point” solution but a continuos improvement process Lean practices & principles are not just “shop floor” improvements Lean can be deployed in Marketing, Finance, Design, Procurement and other Administrative areas Best Companies are migrating lean “beyond shop floor” Lean Manufacturing: A Brief History FORD One of the most noteworthy accomplishments in maintaining low price of Ford Products was gradual shortening of their production cycle “The longer an article is in the process of manufacture and the more it is moved about, the greater is its ultimate cost” – Henry Ford, 1926 Henry Ford identified 5 of the 7 Lean Wastes in the 1920’s Lean Manufacturing: A Brief History TOYOTA Manufacturer of Trucks and Small Automobiles in the post WW-II Japan A need declared by Toyota’s President for a new production method that would help to eliminate wastes and catch up with foreign competitors Chief Engineer studied Henry Ford’s writings and visited Ford plants extensively in the 1950’s Lean Manufacturing: A Brief History TOYOTA This led to “Toyota Production System (TPS)” which became popular in the 1970’s The concept introduced by the Japanese was first applied by the factories in America Later came to be known as “Lean Manufacturing” Lean Production Strategies were adopted by most industries around the world in the 1990’s and beyond Lean Enterprise - Definition Extends lean principles to all business functions including manufacturing, finance, design, planning, human resource and supply chain Lean Enterprise With less: Materials Electricity Does Space more Paperwork Transportation Waste Effort Objectives of Lean Enterprise Total Elimination of Respect for Customer Waste Workers Dignity Satisfaction Business Processes Physical Processes Product Life-cycle DESIGN Concept to Customer Usage to Recycle Order to Delivery SUSTAIN BUILD Transformation to Lean Enterprise Lean Manufacturing Lean Enterprise Pull Pull Applied in All Business Functions Flow of Flow of Parts and Parts Paper / Information Flexible Flexibility in Production,Design, Shop Floor Sales,Marketing Managed Value Stream Managed Old Paradigm New Paradigm Lean Vs. Traditional Half the hours of engineering effort Half the product development time Half the investment in machinery,tools and equipment Half the human efforts in factory Half the defects in output Half the factory space for the same output A tenth or less of in-process inventories Lean Implementation Dimensions Spatial Transactional Resource Organizational Tools & Methodology Value Stream Mapping JIT (KANBAN) SMED Pokayoke Six-Sigma Motion Study DFM Benchmarking KAIZEN Value Stream Mapping Theinitial step which must be taken for an organisation to adopt lean strategies A method of visually mapping the flow of materials and information from the time products come in the back door as raw material, through all manufacturing process steps, and off the loading dock as finished products Value Stream Mapping Canbe a communication tool, a business planning tool, and a tool to manage an Organisation’s change process Visualises the current state of the process activities and guides towards the future desired state Goalis to identify and eliminate waste (any non-value addition) in the process Benefits of Value Stream Mapping Helps visualize the production process at the plant level not just the single process level Helps you see more than waste - it helps you see the sources of waste in your value stream Shows the linkage between the information flow and the material flow Benefits of Value Stream Mapping Makes decisions about the flow apparent, so you can discuss them Forms the basis of an implementation plan Ties together lean concepts and techniques to enable improvements that show up in your organization's bottom line Value of Time Henry Ford, 1922, My Life and Work: "If a device would save in time just 10 per cent. or increase results 10 per cent., then its absence is always a 10 per cent tax. …Save ten steps a day for each of twelve thousand employees and you will have saved fifty miles of wasted motion and misspent energy." Ford on Supplier Development "The man finally consented to try to manufacture at exactly one half his former price. Then, for the first time in his life, he began to learn how to do business. …he found he could make cost reductions here, there, and everywhere, and the upshot of it was that he made more money out of the low price than he had ever made out of the high price, and his workmen have received a higher wage" (Henry Ford, 1926, Today and Tomorrow). The supplier had wanted $152 per body. Ford built a model for $50 in labor and materials. The supplier then agreed to accept $72 per body. Waste To Profit Henry Ford: A wood distillation plant turned scrap wood into methyl alcohol, charcoal, tar, and fuel gas $12000/day could pay 2000 workers @$6/day (Ford's relatively high minimum wage) in 1926 Charcoal briquettes from sawmill chips (Kingsford charcoal) Blast furnace slag cement and paving material A paper plant converted waste paper into binder board and cardboard Fumes from a coating operation were recovered by adsorption in charcoal and reused Keep Your Eye on the Doughnut's Hole • Doughnut = the product • Hole = whatever is thrown away Example: metal sheet with six stamped holes (product) Most people saw scrap for remelting Workers ask, and reuse. Ford's workers saw "What was in radiator caps. Pressing two disks those holes?" made a very strong radiator cap. Organisations Working on Lean Boeing General Motors BMW IBM Carrier Toyota Caterpillar Johnson & Johnson Chrysler Subway Coca Cola US Navy, Air force Dell Gateway Ford Exxon Mobil Success Stories of Lean Implementation Donnelly Mirrors Grand Haven Plant Donnelly Mirrors Grand Haven Plant Results of Improvements Korry Electronics Co. Successfully Implemented Lean in their entire Organisation ISO-9001:2000 Certified Company Located in Washington, USA Specialises in Operator’s Interfaces for Aerospace, Defence & Other Industries Expertise in Electronic Displays, Lighting, Switching … Korry Needed a Better Way To eliminate mistakes To reduce cycle and lead time To lower labour costs To save space To reduce inventory 5S Organization Methods Lean Manufacturing Is Not Only for Big Organisations Case Study of Kamaka Hawaii Inc., USA Kamaka Hawaii Inc. A family-owned and operated business with fewer than 50 employees. Manufactures high-quality Ukuleles (Guitar - like musical instrument), parts, and accessories. Leadingsupplier of Ukuleles to the Hawaii marketplace. Problem Faced by the Company Productdemand outpaced its production capacity Considered moving to a larger facility to allow for expansion Solution GeneralManager decided to apply lean concepts Realized his company did not need to move Could instead improve its process flow Results Decreased work in process by 60 percent Reduced space requirements and product damage Streamlined production process Simplified order entry Improved customer service and flexibility to manufacture products as per order Avoided expense of moving to larger facility, while expanding production The Impact of Becoming Lean Toyota has overtaken Ford as number two in the global motor industry It intends to overtake General Motors to become number one by 2010 “Brilliant process management is our strategy.” Senior Toyota executive How Important Is Lean? To Conclude: How to Make Lean Work? Philosophy System Techniques People Lean People Make a Lean Enterprise An enterprise is a collection of people voluntarily banding together to produce a product or service To have a lean enterprise, you have to have lean people People have to get lean before the enterprise can get lean Lean People Have Something Skills Pre-requisites to applying the knowledge And experience Understanding value Identifying and working in the value stream Being able to adapt rapidly Leading from below Taking the initiative Innovating: changing things for the better Having a collaborative outlook Obstacles Resistance to change – An emotional / Behavioural Response to real or imagined work change Main Reasons For Resistance To Change Culture Limitations Knowledge Limitations Management Limitations Culture Limitation An individual’s misconception about change Poor Communication Fear of failure Climate of mistrust Time Pressure Knowledge Limitation Lack of Training Lack of Knowledge in both Management and Team Members Lack of Team and Meeting Skills Management Limitation Lack of Management Commitment Lack of Leadership Unprofessional behaviour of Management Winston Churchill On Change “To improve is to change; To be perfect is to change often” Most Companies have “Continuos Improvement” in their Quality Policy but still resist Change Remember… Improvement Requires Change Change Requires Experimenting No Cookie-Cutter approach to Change No one gets it right the first time, every time! A Change-friendly culture will use “failure” as an opportunity to learn and share Become Lean & Attain Innumerable Benefits Improved customer Decreased down service time Reduced inventory Increased flexibility costs Reduced lead times Increased quality Growth from within Reduced scrap the organization Improved cash flow Better utilization of Increased resources,rather productivity than adding resources And Much More… Thank you!